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BLOG: The mule network

Alvin Ow | July 8, 2011
In the ‘old days’, fraudsters who controlled mules mostly recruited them in the real world. Today, they have cracked the formula of herding mules online.

Every fraud operation can be split into two parts: obtaining credentials and cashout. In the former, fraudsters use various tools and methods, such as phishing, vishing and malware to obtain information on their victims. In the latter, fraudsters monetise the stolen data, or in other words - they perform a "cashout".

There are various forms of cashout, depending on the type of credentials that the fraudsters have in their possession (and that, in turn, is derived from the type of tool or method used to obtain them in the former stage). Cashing out credit cards stolen from a hacked online merchant, a "shopadmin" in fraudster terminology, is usually done by ordering items online and later selling them off. Online banking credentials, on the other hand, would be usually cashed out through a money transfer to another account. In both cases, and most other types of cashout, the fraudster would need an online account or a real-world shipping address in his possession. Those are usually obtained through the use of mules.

In the "old days", fraudsters who controlled mules mostly recruited them in the real world. Unlike the hackers, who could sit on the other end of the planet, "mule herders" had no such luxury. The mules themselves were often junkies and other accomplices of the mule herder interested in making a quick buck. Today, however, is a whole different story. As in other areas of fraud, fraudsters were able to streamline the process of recruiting and controlling mules with an astounding success rate, while overcoming the biggest barrier of the mule herders - location, location, location.

An efficient operation anywhere

By cracking the formula of recruiting and herding mules online, fraudsters can sit in Russia, Nigeria or any other place on the planet and run a very efficient mule operation anywhere on the planet. A single mule herder can run multiple mule operations, each focusing on a different country and language. If in the past, most mules were accomplices, today, they're mostly unwitting mules, regular Joes who get scammed into being mules and are not necessarily less innocent than the actual victims of the fraud.

Just like any other type of scam, mule recruitment can be executed in various levels of sophistication. They all share a common trait - they all approach job searchers with a cover story of being a legitimate company searching for "work-from-home" employees, who came across the recipient's CV and is interested in recruiting him/her. The least sophisticated type of mule recruitment is done exclusively via e-mail.

Similar to a Nigerian scam, individuals receive an e-mail from "company X" describing the usual shtick, without forgetting of course to mention the wage that they offer in an attempt to lure the recipient. The e-mail then simply asks the recipient to reply to the message and send his/her personal information. More sophisticated operations contain a link to a website of the fake company, appearing much more convincing as a legitimate employer.


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